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Prof Urges 9th Circ. to Nix Ore. Immunity in Oracle IP Suit

Law professor and constitutional law expert Erwin Chemerinsky filed an amicus brief Tuesday in a Ninth Circuit appeal involving Oracle’s copyright infringement suit against Oregon over the state’s heath insurance exchange, urging the court to recognize federal authority over copyright law.

Chemerinsky, the founding dean of the University of California, Irvine School of Law, urged the appeals court to reverse a lower court decision to the extent “it held the State of Oregon enjoys sovereign immunity from claims arising under federal copyright law.”

Oregon is appealing a November 2015 district court decision finding the state must face Oracle’s copyright suit alleging that the exchange, Cover Oregon, continued to use the software company’s work without paying $23 million in fees.

U.S. District Judge Anna J. Brown said that Oregon waived immunity to a suit in federal court, but also ruled that the Oregon Department of Consumer and Business Services is protected from Oracle’s claims, saying the agency has sovereign immunity under the 11th Amendment. That aspect of the ruling is what Chemerinsky urged the appeals court to reverse.

Chemerinsky said that Congress has the power to make individual states subject to lawsuits for violations of federal law. Although the 1996 U.S. Supreme Court ruling in Seminole Tribe of Florida v. Florida “abruptly upended this settled understanding,” he said, the Ninth Circuit “should hold that Congress’s abrogation of state sovereign immunity for violations of the Copyright Act was a permissible exercise of its Article I powers,” he said.

Chemerinsky’s analysis touched on the framers’ intent. “The need to establish federal authority over copyright law was a meaningful aspect of the Constitutional Convention,” he wrote.

He also argued that the Eleventh Amendment was “intended to constrict federal jurisdiction only over diversity suits — not claims arising under federal law.”

The Supreme Court held in Seminole Tribe that the Eleventh Amendment prevents Congress from doing away with state sovereign immunity in a case involving the Indian Commerce clause, but Chemerinsky said that decision’s “incoherent rationale should not be extended to the claims arising under Copyright Clause.”

Oregon urged the Ninth Circuit in its opening appeal brief in April to reverse the district judge’s ruling, arguing that the state never waived its Eleventh Amendment immunity.

Oracle filed its suit against Oregon in fall 2014, weeks after the state sued Oracle in state court claiming it sought more than $240 million in false claims under its contract to develop the state’s health insurance exchange, which was filled with technical glitches.

Cover Oregon shut down in June 2015. The Oregon Legislature assigned all of Cover Oregon’s liabilities to the department in March 2015 as part of the exchange’s dissolution, and it took Cover Oregon’s place in the Oracle litigation, according to court documents.

Chemerinsky is represented by Ryan Y. Park of Boies Schiller & Flexner LLP.

Oracle is represented by Dale Cendali and Joshua Simmons of Kirkland & Ellis LLP, Brenna K. Legaard and Jeffrey S. Eden of Schwabe Williamson & Wyatt PC, Karen G. Johnson-McKewan, Robert S. Shwarts and Erin M. Connell of Orrick Herrington & Sutcliffe LLP and Oracle in-house counsel.

Oregon is represented by David B. Markowitz, Peter H. Glade, Lisa A. Kaner, Dallas S. DeLuca and Harry B. Wilson of Markowitz Herbold PC.

The case is Oracle America Inc. v. State of Oregon, case number 15-35950, in the U.S. Court of Appeals for the Ninth Circuit.